NAB role tailor-made for former analyst

Ross Brown muses that after spending 2½ years on a sabbatical, his wife told him that they couldn’t both be stay-at-home parents forever.

So when the former top-rating banking analyst received a surprise phone call late last year from
National Australia Bank
to see if he was interested in a job, Brown, 47, says the timing was ideal.

“I was semi-retired and I was starting to miss the intellectual challenge and interaction you get from financial markets and banks and my wife was complaining I was hanging around the house too often," he says with a grin, adding that he was also down to his last suit.

After travelling through Europe with his family and toiling in some private farming investments since leaving Deutsche Bank in 2009, Brown joined NAB in November as executive general manager of investor relations.

Brown spent 13 years as a Deutsche Bank banking analyst, including a stint ranked as No. 1 in the country.

He has gone from being the man scrutinising the banks on behalf of investors, to selling NAB’s message to shareholders. He was always a believer in NAB, which until recently was a perennial underperformer.

As an analyst, Brown was one of the few to put a “buy" rating on NAB after the disastrous foreign exchange trading scandal that cost the bank $360 million in 2004.

With the benefit of hindsight, Brown admits that the call was too early, as NAB went on to suffer from previous management’s poor investments in Britain and synthetic collateralised debt obligations.

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But the tide is turning for NAB under the leadership of chief executive
Cameron Clyne
, who has made return on equity, total shareholder return and customer value a priority.

“I always thought that of the four major banks, NAB had great potential, but for most of the last decade this potential went unrealised," Brown says.

“I know Cameron and his team are pretty focused on realising this potential and from my perspective it will be great to play a role in that."

Brown, who began his career at the Reserve Bank of Australia in Sydney before moving to the private sector, says that as an analyst working for an investment bank, it was easy to criticise the performance of a bank and the pace of change.

Now, he sees things differently.

“The reality is that NAB has 44,000 employees and making changes in an organisation of this size is not easy," Brown says.

“You need robust processes, strong leadership and consistency in behaviours – which are things not often found in investment banking."

In what might be perceived by some as a dig at his former industry, Brown says history shows it’s much better to be an employee of an investment bank than a shareholder.

“Mainstream commercial banks have found a much better balance between shareholder and employee returns," he says.

Still, Brown was one of the beneficiaries to ride the investment banking boom before the 2008 credit crisis, which was a period when top-rated research analysts could command pay packets well above $1 million.

Some observers say Brown – a New Zealander who moved to Tasmania at the age of 15 – got out of the industry at the right time.

“That industry is going through a difficult time and a major restructure but it’s probably long overdue," Brown says.

Memorably, the former Deutsche analyst told Macquarie Group’s management in 2009: “The bottom line for Macquarie and most of the investment banking world is if it wasn’t for government guarantees, we may not be sitting here today."

In his new role, Brown envisages there may be times he has to give frank feedback to his NAB superiors.

“If I’m to be of value to NAB, I need to make sure that I’m providing the organisation with honest and direct feedback on how analysts and shareholders view our performance," he says. “Which means inevitably from time to time, the conversations I’m going to have are likely to be uncomfortable. But I wouldn’t have taken the role if I didn’t think Cameron and his team weren’t receptive to an open and honest dialogue."